Revenue of $62.4 billion increased 16% in 2012, and net profit of 10.2 billion yuan increased 35%. The company released financial reports that exceeded expectations. Revenue of $62.36 billion in 23 increased 16.2%. Among them, H1/H2 was 29.65 billion, up 14% and 32.71 billion, respectively.
The company's net profit to mother in '23 (including Amer) of 10.24 billion yuan increased 35%; H1/H2 net profit of 4.75 billion yuan increased 32% and 5.49 billion, respectively; without Amer's influence, net profit to mother of 10.95 billion increased 45%, and net profit of 17.6% increased by 3.5 pcts.
The company plans to pay an ordinary final dividend of HK$115 per share. Previously, the mid-term dividend was 82 points per share; the dividend rate for 23 was 50.7%.
We expect each brand to grow at a 24-year rate or follow the CAGR guidelines previously given by the company. Anta and FILA are expected to grow by 10-15%, Descente by more than 20%, and Kolon by more than 30%.
The multi-brand strategy has achieved remarkable results, and Anta continues to promote DTC transformation
Revenue by brand, Anta's 30.31 billion rose 9%, accounting for 49% of total revenue; FILA's 25.1 billion rose 17%, accounting for 40% of total revenue; the other 6.95 billion dollars increased 58%, accounting for 11% of total revenue; of these, 23H2 Anta's 16.14 billion increased 12%, FILA 12.87 billion increased 20%, and other brands, 3.7 billion, increased 44%.
By category, footwear revenue of 25.33 billion yuan increased 13%, clothing of 35.07 billion yuan increased 19%, and accessories of 1.96 billion yuan increased 18%.
In the Anta brand sub-channel, DTC 17 billion increased 24%, e-commerce 9.93 billion increased 3%, traditional wholesale and other 3.37 billion decreased 23%.
A healthy inventory level lays a good foundation for growth. By the end of '23, the company's inventory of 7.2 billion was reduced by 15%, and the average number of inventory turnover days was 123 days reduced by 15 days.
In '23, OPM increased 24.6% by 3.7 pct, which greatly increased the company's gross profit margin of 62.6% and 2.4 pct; by brand, Anta 54.9% increased by 1.3 pct, FILA 69% increased 2.6 pct, and the other 72.9% increased 1.1 pct.
In '23, OPM increased by 24.6% by brand; by brand, Anta 22.2% increased 0.8 pct, FILA 27.6% increased 7.6pct, and 27.1% of other brands increased 6.5 pcts.
Net interest rate of 16.4% increased by 2.3 pct to mother in '23; without Amer's influence, net interest rate of 17.6% increased by 3.5 pct.
Strengthen the layout of Descente Colon and drive store efficiency growth through operational optimization
As of the end of '23, there were 7053 Anta stores worldwide (+129), 2,778 Anta Kids (year-on-year +99), FILA in 1972 (year-on-year -12), Decent 187 (year-on-year), and 164 Kolon (+3).
The company expects that by the end of '24, Anta will have 7100-7200 stores in mainland China and overseas, 2,800 Anta Kids stores in mainland China and regions, 2,100-2200 FILA stores in mainland China, Hong Kong, Macau and Singapore, 220-230 stores in mainland China, Hong Kong and Macau, and 180-190 Kolon stores in mainland China and Hong Kong.
Consolidate the three core competencies and insist on the high-quality growth of multiple brands
The company continues to strengthen the competitiveness of various brands in market segments, improve retail operation efficiency, and the differentiated layout has achieved remarkable results: Anta's 23 reforms have achieved remarkable results, insisted on empowering the public with professionalism, improving product and channel matrices, returning inventory to a healthy level, and clear product positioning; the 24-year layout of Olympics-related marketing further strengthened brand mentality, and the basketball series design and Owen series strengthened or increased, and the scale grew steadily.
FILA continues to strengthen top products, brands, and channel strategies. Over 23 years, many operating indicators have surpassed business goals. The e-commerce business performance is outstanding, and e-commerce business performance is outstanding, and breakthroughs have been achieved on live streaming and social platforms; footwear sales have surpassed 10 billion dollars, and the share of professional sports sales has increased by nearly 5 pcts, maintaining the number one mental share in fashion awareness, golf, and tennis.
Descente and Kolon have maintained rapid growth, focusing on their own differentiated outdoor scenes. Descente focuses on golf, skiing, and triathlon, while Kolon focuses on the two core scenarios of camping and hiking, strengthening brand mentality and enhancing channel layout.
Furthermore, in '24, the company completed the acquisition of the yoga clothing brand MAIA ACTIVE, further enriching the brand portfolio, empowering brand growth with the Group's brand operation, retail and supply chain management capabilities, and tapping into the growth potential of the female consumer market.
AMER guides profit conversion. It is proposed to record a non-cash accounting profit of RMB 1.6 billion. AMER was successfully listed recently, with revenue of RMB 31.25 billion (yoy +30%) for 23 years, and all 5 targets of 1 billion euros were completed one year ahead of schedule. EBITA of 3.75 billion yuan (yoy +45%) increased operating profitability, with a net loss of 1.37 billion yuan for the whole year, mainly due to impairment losses of intangible assets.
According to AMER's guidelines, it is expected to achieve profits in 24, contributing to the Group's profit growth; in addition, due to its listing, the company plans to record about 1.6 billion dollars in one-time non-cash profits.
Update profit forecasts and maintain “buy” ratings
The company continues to adhere to the “single focus, multiple brands, and globalization” strategy. Multiple brands are growing steadily, the efficiency of Anta stores is steadily improving, FILA's profitability has increased dramatically, and Descente and Kolon continue to perform well, and Amer is expected to reverse losses and contribute to profit growth.
We updated and adjusted the profit forecast. Since the consumer market still falls short of the expected reduction in revenue, and considering the increase in OPM for each brand's operating efficiency, and considering the one-time profit recorded in the AMER listing in 24, 26, the company's revenue is estimated to be 708/795/87.8 billion yuan (728/86.6 billion yuan, respectively, 24-25 years ago), and the net profit attributable to mother was RMB 132/135/156 billion yuan (the value was 11.3/13.5 billion, respectively) and EPS was 4.7/4.8/ 5.5 yuan/share (24-25 years ago, the value was 4.0/4.8 yuan/share, respectively), and the corresponding PE is 16/16/14x, respectively.
Risk warning: Macroeconomic growth falls short of expectations, rising labor costs and operating expenses, falling short of expectations in terminal store expansion, falling short of expectations, offline recovery falling short of expectations, intensifying competition in the sports brand industry, etc.